Kerry For Business

July 28, 2004

I’ve received dozens of responses to the Bush v. Kerry discussion taking place on this site. (See below for postings.) I’m assembling them into a coherent digest and will get that up as soon as possible. In the meantime, here’s an excerpt from a recent email from my original debate opponent, Glen Ward:

I totally agree with you that no President has control of what the stock market does. However, the President does affect the economy with tax policy and I didn’t see your argument for why raising taxes would benefit anyone. You fail to give any credit to Bush for turning the economy around, even in tumultuous times. I would hate to see Kerry screw it up with his tax increases. And if you really think Kerry will cut spending, you’re dreaming. Where do you think the most liberal senator will cut? Let’s cut defense spending in the middle of the war on terror, right?

There’s probably no better way to respond than to post comments from Mr. Kerry’s July 16th interview with BusinessWeek Online:

The deal you are offering voters seems straightforward — more affordable health care and more money for schools, financed by higher taxes on the rich.

It’s going to be financed by rolling back [cuts for families earning more than $200,000]. I’m not going to tax the wealthy. There are pejoratives in the phrasing.

Both you and President Bush propose to cut the deficit in half over four years — what’s the difference?

But he doesn’t! He has $6 trillion in proposals and initiatives that are not paid for. I don’t. I’ve showed you the loopholes I would close. Show me any loophole George Bush has talked about closing. I mean, the Bush talk on this is fantasyland, folks…. He told you we weren’t going to have a deficit, we could afford the tax cuts. That was the biggest B.S. I’ve ever heard in my life. We went straight into deficit.

So you believe that just by rolling back tax cuts for top-end taxpayers, you can fund a health plan and deficit reduction?

Yes — absolutely. Let me be very clear: I like low marginal rates. I fought to get low marginal rates. I voted for going down to the 28% and 14% brackets [in 1986]. I am not going to raise marginal rates — ever — above the rates we had under Bill Clinton.

Under your plan, upper-income individuals also lose their tax cuts for capital gains and dividends. Won’t that hurt investment?

With all due respect, look at what happened to investment in the 1990s.

We had a tech boom.

I believe we can have a tech boom again…. [But] Bob Rubin and a lot of smart people tell me the capital-gains differential [doesn’t matter much]. When you’re at [a capital-gains rate of] 20%, it doesn’t deter you from making millions with a new idea. So you’re not going to change investment patterns.

How can you expand health-care eligibility and control costs?

Let me tell you how: You’re paying for very inefficient delivery of care [today]…. I put together a set of principles. I want to have the marketplace work. I want people to have choice. I don’t want Washington mandates. I don’t want a new bureaucracy…. What we’ve done is create a huge incentive for business to say: “That makes so much sense that I’m buying in.” In exchange for [companies] having an early health-and-wellness program [and] for [agreeing to] pass the savings along to their employees…we’re going to pick up 75% of the cost of catastrophic care. That reduces their costs and makes them more competitive.

If Congress balks at the tax changes you seek and you’re short of cash for your programs, then what?

We would not be able to do as much on health care, and that is the choice in this race. George Bush wants to defend tax cuts for folks earning more than $200,000 a year. I say we can have [better] health care if we roll those back. That’s your choice. And I believe if I get elected, America will have made that choice.

And here’s a little more on the Bush tax plan, courtesy of Andrew Tobias:

Yesterday, I linked to a report that shows how, for the 2003 tax cut . . . a tax cut that will save a friend of mine $800,000 a year in taxes on $3.2 million he gets in dividends each year . . . the average tax reduction for 88% of all taxpayers will be $4.

Clearly, my friend is not included in that 88%. But 118 million other taxpaying households are — perhaps yours is one of them — and the most any of them will get from the 2003 tax cut in 2006 is $100 . . . with an average, as I say, of $4.

Several of you asked how this is possible.

Bob McIntyre of the Center for Tax Justice, explains: “The 2003 Bush tax cut has much less of an effect in 2006 than earlier because by 2006, the only provision of the bill is the cut in taxes on dividends and capital gains. By 2006, other changes either would have taken effect anyway, or expire.”

It’s as almost as if the average voter was tricked (mis-led?) into accepting a small soon-to-evaporate tax cut in return for granting the wealthiest people in the country a giant long-term cut. If I were a typical taxpayer — Democrat or Republican — I’d be furious. Fortunately, I’m rich (in a very minor way) so this worked out fine for me. Yet somehow I think President Bush has it all wrong, with desperately sad consequences for our country.

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